Saturday, September 3, 2016

This Week in The Bahamas

Commentary by Elcott Coleby

Government
announces Committee to process Baha Mar claims

On August 22, 2016, the Supreme
Court approved the plan to remobilize the stalled Baha Mar resort and one week later
on
Sunday, 28th August 2016, the government announced a committee to
settle severance payments owed to displaced Baha Mar workers and to process
claims by unsecured Bahamian creditors

The members of the Committee
are: His Excellency Mr. James Smith CBE; Mr. Grant Lyon (Liquidation Claims
Advisor to the Government); Ms. Yanping Mo (representative of the Bank); Mr.
Norbert Chan (representative of Deloitte); and Mr. Tiger Wu (representative of
CCA).

According to the press release,
these claims are being paid from monies which have been made available by the
Bank, as the Baha Mar companies in liquidation have no assets from which to pay
creditors. The Bank will shortly place on deposit in The Bahamas the funds
necessary for the work of the Committee; to settle the Bahamian employees’
related claims as outlined by the Prime Minister during his address to the
Nation on August 22nd; and to administer and pay the claims of
Bahamian creditors, according to the process which has been indicated.

Further announcements on the
specific details of the process will come from the Committee. The Government stated
that it hoped that Bahamian employee claims will be settled no later than 30th
September 2016 and that all other claims will be dealt with on or before 31st
December 2016.

This day in The
Bahamas Parliament (31st August 2016)

The
Bahamas Parliament met on Wednesday, 31st August 2016 to mainly debate
an amendment to the Securities Industries Act (SIA) 2015. The amended bill seeks
to bring greater clarity to the role of the Commission, specifically at it
relates to hearing and ruling on commercial disputes. Leading off the debate
was State Minister for Finance the Hon. Michael Halkitis

Currently,
the SIA’s enforcement regime allows the Commission to pursue one of three
courses of action in resolving matters of discipline. The avenues are the
judicial process or the courts, an independent hearing panel established by the
Securities Commission or through a direct settlement between a licensee or
registrant and the Securities Commission. Issues of criminality are referred to
the Office of the Attorney General for prosecution.

Under
this amendment, the commission is empowered to select a wholly independent
panel with the specific mandate of hearing and ruling on specific commercial
matters. These amendments close gaps in the Commission’s supervisory and
disciplinary regime. By amending section 33(2) of the Bill, the new Bill
repeals the requirement that any panel established by the Commission must
include a member of the Securities Commission. The Hearing Panel is “empowered
by the Commission to adjudicate matters of discipline arising in relations to
breaches of the Securities Industries Act” said Halkitis.

The
Bill was seconded by Financial Services Minister the Hope Strachan who
delivered the second reading and commended the Bill to the House.

Matters
arising under the agenda item STATEMENTS BY MINISTERS are as follow:

Prime
Minister the Rt. Hon. Perry G. Christie updated Parliament on the deal his
government negotiated with the China EXIM Bank and China Construction of
America to complete the Baha Mar project and make whole all outstanding
financial claims against the project by public corporations, former employees
and unsecured Bahamian creditors. According to Mr. Christie, displaced employees
will receive all of their severance pay, pension contributions, vacation pay,
pay in lieu of notice of termination and NIB contributions will be paid. Payments
to employees are expected to be completed by 30th September and payments
of claims submitted by unsecured Bahamian creditors are expected to be
completed by the end of 2016. Additionally, monies owed to Bahamas Power and
Light (BPL) will be paid as part of the agreement.

Responding
to critics, Mr. Christie reiterated that the China EXIM Bank requested the
documents sealed until the transactions are fully executed and argued that this
is a normal practice in business with agreements of this level of market sensitivity,
difficulty and financial value especially given the financial losses suffered
by the EXIM Bank in this project to date. Further, the Prime Minister pointed
out that business deals of this magnitude are not negotiated in the media.

On
the issue of wild speculations on concessions offered to CCA, Mr. Christie
repeated that the CCA was given concessions similar to those approved to them
by the former Free National Movement government. He also cited the limitations
of the Bahamas government in negotiating concessions to investors because no concession
could surpass those approved for the Atlantis Resort.

Minister
of Youth, Sports and Culture the Hon Daniel Johnson informed the House that The
Bahamas secured the rights for the IAAF World Relays for 2019 and 2021 in
addition to hosting this event in 2017. In offering congratulations Minister
Johnson recognized the country’s entire Olympic team, TEAM BAHAMAS, former 400m
world, Olympic and Senior CAC champion Tonique Williams Darling, and singled
out Olympic champion at 400m Shaunae Miller and our men’s 4x400m relay team who
secured the bronze medal in Rio. The honourable member for Bamboo Town, Renward
Wells brought congratulatory remarks from the official opposition.

Minister
of Social Services and Community Development the Hon. Melanie Griffin tabled a
copy of the full Household Expenditure Survey 2013. The Minister pointed out
that a Living Conditions Survey for The Bahamas was conducted in 2001, but more
current data was needed to inform public policy on living conditions in The
Bahamas. She mentioned the proposed National Health Insurance (NHI) Plan, the
Conditional Cash Transfer program, R.I.S.E. amalgamated with the uniform and
food assistance program through a single debit card and a shared vision for and
comprehensive approach to education as some of the policy initiatives advanced
by the government to improve the lives of all Bahamians.

The
standing committee on privilege was activated to investigate whether or not the
Parliamentary privilege was breached in connection with the tabling Save the
Bays emails in the House and to determine if there is evidence that the emails
came into the possession of parliamentarians improperly as the court concluded.

In Passing…

Speaking
to the press earlier this week, State Minister for Finance confirmed that
homeowners who suffered through foreclosures and managed to secure another
mortgage on a different home will be eligible for stamp tax waiver on this new
residential property.

As
the public debate over the controversial Letter of Intent (LOI) rages on, Long
Island MP Loretta Butler-Turner said Bamboo Town MP Renward Wells has an
obligation to explain the full extent of his involvement in the signing of the
LOI that led to his termination as Parliamentary Secretary in the Ministry of
Works and his subsequent resignation from the parliamentary caucus of the
Progressive Liberal Party. When questioned about the LOI, opposition leader Dr.
Hubert Minnis was initially quiet but late this week said that Well’s
explanation back in 2014 was satisfactory and he now fully understands Wells’
involvement.

Former
Bahamas Contractors Association (BCA) President Stephen Wrinkle and current
president Leonard Sands expressed different views on whether a BCA member
should sit on the committee established by the Baha Mar stakeholders to process
claims submitted by both former unsecured Bahamian creditors. Mr. Wrinkle
believes that contractors engaged on the project should have a representative
on the committee but Mr. Sands believes that the contractors should not stick their
noses into what he called a “private business arrangement.” Both men however
are taking a “wait and see” approach to the work of the committee.

Chairman
of that special purpose vehicle (SPV), Resolve Bahamas, James Smith told the
media this week that a report summarizing the work of the committee over the
past year is complete and will be presented to the government “soon.” Resolve
was established in October 2014 to hold $100 million in non performing loans
from the Bank of the Bahamas to allow it to return to compliance with Central
Bank regulations on statutory capital ratios. During the operational phase,
properties underwent valuations that were compared against the bank’s book
value and a number of properties were advertized for sale and are at various
stages of being sold.

John
Pinder Jr., the twenty-seven year old son of Public Service Union chief John
Pinder Sr. was murdered Monday evening at his home by persons unknown sometime
around 10pm. A grief stricken John Pinder Sr. said “you feel it more when it
hits home.” He said his son was a good boy who was not involved in questionable
activities.

Fred
Mitchell, the incumbent MP for Fox Hill launched his re-election campaign for
that seat on Tuesday night at the Faith Mission Church of God in Fox Hill.
Thankful for the opportunity to serve again, Mitchell committed himself to
assisting the youth in bringing their communication skills on par with their tremendous
athletic talents. In addressing the high level of rejection of our youth who
apply for visas to attend high schools in the United States, Mitchell told
those gathered that in addition to dissatisfaction with the school operations,
many of the young applicants are rejected because they are unable to satisfy
the US consul officer of why they want to attend high school in the United
States.

Saying
that many will have much to say about his decision and will be disappointed,
FNM candidate for the Bain and Grants Town constituency Leonard Sands announced
that he had ended his pursuit of front line politics for “personal reasons.”
This announcement came on Tuesday, more than one month after he suspended his
campaign.

Deputy
Assistant Secretary for Energy Diplomacy in the U.S. Department of State’s
Bureau of Energy Resources, Robin Dunnigan visited The Bahamas this week and
while here, she paid courtesy calls on the Bahamas Deputy Prime Minister and
Minister of Works and Urban Development the Hon. Philip Davis and Minister of
the Environment and Housing the Hon. Kenred Dorsett at their respective ministries.
Ms. Dunnigan was accompanied by U.S. Embassy Charge d’Affaires Lisa Johnson on
those visits. In an interview with the Nassau Guardian, Dunnigan touted the
energy reform initiatives being taken by The Bahamas as necessary in becoming a
regional leader in the energy sector. One of those steps taken was ratifying
the Paris Agreement and committing The Bahamas to ensuring that thirty percent
of its energy source would be renewables. She also said that US energy firms
are “chomping at the bits” to enter the local solar energy market as soon as
the government goes out to tender for solar power generation, US companies will
be encouraged to compete for the business.

CEO
of the Bahamas Chamber of Commerce and Employers’ Confederation Edison Sumner
said this week that the credibility of Prime Minister Christie is on the line
with his 22nd August announcement of a deal with the China EXIM Bank
and the China Construction of America to complete the stalled Baha Mar project
and the compensation of employees and unsecured Bahamian creditors. This is
fair in light of repeated announcements by the Prime Minister but if and when
the payments are made and the project remobilized, would the Chamber Chief
opine to the media that the Prime Minister lived up to his word and has
credibility? He should in the interest of fairness and balance.

Facing
the reality of an imminent liquidity crunch and the real prospect of a rate
hike, Minister with responsibility for the National Insurance Board the Hon.
Shane Gibson said that “the question is not if we have to do something, it is
when.” He was referring to the ILO’s recommendations of a rate hike in its 10th
Actuarial Review of the National Insurance Board (NIB). The report found that
the current 6.2% contribution rate was insufficient to sustain the board beyond
2029.

The
Bahamas Supreme Court on Thursday quashed the 2013 death sentence of Kofhe
Goodman, the man convicted of the 2011 abduction and murder of 11 year old
Marco Archer; the court ordered a new trial as soon as possible. The Appeals
Court ruling comes amid charges that pre-trial publicity, the behavior of the
defense and jury irregularities prejudiced the defendant who did not get a fair
trial. Although eligible for bail, Wayne Munroe attorney for Goodman, said he
“cannot imagine a successful bail application” if a retrial is scheduled within
a reasonable time frame. Archer, a resident of Brougham Street, left home to go
to the candy store and was never seen alive again. His partially decomposed
body was discovered behind a building in the western district of Nassau days
later. This resulted in Marco Law and the Marco Alert System.

Tourism
Minister the Hon. Obie Wilchcombe told the media on Wednesday that the
diligence of the government in enforcing the new gaming laws of the country has
resulted in the closure of some 200 web shops. He said that the government is
keen not to have the proliferation of gaming houses near schools, communities
and churches. Wilchcombe also revealed that the due diligence work of the
Gaming Board is nearing completion and that regulatory body should submit a
report with recommendations of who should be awarded gaming licenses to operate
web shops.

In
a letter addressed to Prime Minister Christie, former Exuma MP George Smith
offered himself for consideration as a candidate for the Exuma and Ragged
Island constituency. Smith said that he was encouraged by Exuma residents to
serve for a portion of one term to assist in building a cordial relationship
between the central government and Exuma.

FNM
Member of Parliament for North Eleuthera the Hon. Theo Neilly confirmed this
week that he is bowing out of front line politics and would not be seeking the
party’s nomination for the upcoming general elections for “personal reasons.” “I
had to go through the process, meet with my family at several family
gatherings, thinking it through and making sure it’s the right decision” said
Mr. Neilly.

The
Democratic National Alliance staged an “unseal the deal” demonstration at the
East Street Hill Post Office and in Rawson Square on Wednesday. Mr. McCartney
argued that the deal is not actually a deal and that the Christie
administration has been “untruthful” with the Bahamian people. It is important
to note that the only public component of the agreement to remobilize Baha Mar
is the concessions given to the China Construction of America (CCA) are similar
to the concessions given to them by the former Ingraham administration under
the terms of the Hotel Encouragement Act. Typically these types of concessions
allow for duty free importation of construction and building materials. The
other aspects of the deal are between private interests – the China EXIM Bank,
the potential buyer and CCA. Much of the back and forth in the press about a government
secret deal and demonstrations are much ado about nothing – a fabricated storm
in a tea cup if you will. CCA will be allowed to import 2x4 lumber, plywood, pvc
pipes, fittings, tiles, thin set, grout etc all duty free – raw materials
necessary to complete the project just like the people in hurricane ravaged
Long Island and Acklins; Prime Minister Christie has been very clear about
that. The big important deal Bahamians need to watch out for is the heads of
agreement to be negotiated between the government and the new buyer of the
project and the new casino operator. China EXIM Bank has not selected a buyer
as yet according to Prime Minister Christie.

With
eight confirmed cases of Zika infection and a number of suspected cases under
investigation, Health Minister Dr. Perry Gomez said that the government is
awaiting more information before the public can be updated on the current
status of level of Zika viral infections in The Bahamas. Extensive spraying and
an aggressive public education program continue to mitigate public health risks
associated with the Aedes Aegypti mosquito, the carrier of the virus.

Bahamasair
advised the general public on Thursday of a fraudulent scheme they uncovered involving
individuals offering unauthorized, deeply discounted tickets on Bahamasair. The
scam was turned over to the police and Bahamasair further advised all customers
to purchase all Bahamasair tickets from its approved sales channels (Palmdale
ticket office, Oakes Field ticket office, Freeport ticket office, all airport
counters, and authorized travel agencies). All tickets purchased outside of these
approved channels will be denied for travel said the statement.

Chairman
of the Bahamas National Festival Commission (BNFC) Paul Major confirmed on
Thursday that the full financial report on the 2016 Bahamas Carnival has been
completed and submitted to the “principals” meaning the government. There were
those who were made to believe that the report would be made public on Thursday
of this week based on pronouncements attributed to Tourism Minister the Hon.
Obie Wilchcombe.

Confirming
that there have been no cancellations due to the Zika outbreak, Tourism
Minister Wilchcombe told the media this week that his ministry will meet with
industry stakeholders to discuss preventative measures against the Zika virus.
Mr. Wilchcombe supports a regional funding effort to support preventative
measures to protect the industry. Using Disney world as an example, Wilchcombe
said various properties at Disney World, including Universal Orlando Resort and
SeaWorld have supplied mosquito repellent spray and lotion to protect their
guests. “The country has to adapt to a ‘state of emergency’ so that we are
fighting to ensure prevention” said the Minister.

In
its July 2016 Monthly Economic and Financial Development Report, the Central
Bank expects an economic boost for the remainder of 2016, especially in the
areas of construction and room occupancy in the wake of the announcement of the
remobilization of the $3.5 billion Baha Mar resort. Prime Minister Christie
said that his government will work assiduously to ensure that the casino, the
casino hotel, the convention center and its hotel and the golf course will all
be opened by the end of the 2016/2017 winter season.

Expressing
surprise at the recent sovereign rating downgrade of The Bahamas by Moody’s,
CEO of the Chamber of Commerce and Employers’ Confederation Edison Sumner urged
both government and opposition forces to articulate their plans to get the
country out of its current “economic doldrums” as he called it. It was not
enough to stand on the outside and criticize said Sumner “but it’s also
important for the opposition parties to demonstrate that they also have a plan
to get us out of this situation and show how they can improve and grow the economy.”

Former police constable and lawyer Maria Daxon was charged in the
magistrate’s court on Thursday with defaming the character of Police
Commissioner Ellison Greenslade and Assistant Commissioner of Police Leon
Bethel. It was alleged that between 26 and 30 August 2016, Ms. Daxon wrote
defamatory statements about the senior officers which were likely “to injure
and expose” the officers to “general hatred, contempt or ridicule.” Daxon pleaded
innocent and opted to have her case tried in the magistrate’s court. The
presiding judge was Andrew Forbes.